Fort Lauderdale man ran Ponzi scheme, lawsuit alleges

George Elia is accused in court papers of promoting himself as an investment…

February 20, 2012|By Jon Burstein, Sun Sentinel

For his investors, he was the financial guru able to make them money while everyone else seemed to be losing it. Soft-spoken and well-dressed, he would lunch with clients at his favorite table at The Capital Grille in Fort Lauderdale.

George Elia, 68, stopped showing up at the restaurant last year, about the same time that some clients of his business, International Consultants & Investment Group Limited Corp., said they began having doubts about him. Those investors say they are now wondering where their money went.

The Fort Lauderdale real estate broker is under state investigation as he faces a $4 million lawsuit filed by a family alleging that Elia has been running "a massive Ponzi scheme." Bank accounts for his businesses have been frozen because of the litigation, with an accountant finding "significant irregularities," including Elia tapping the businesses to cover personal expenses, court records show.

In addition to the state Office of Financial Regulation confirming there is an open inquiry into Elia, three investors from Wilton Manors told the Sun Sentinel that they have been interviewed by Federal Bureau of Investigation agents about their dealings with him.

"The FBI cannot confirm or deny the existence of an investigation," said Miami spokesman Michael Leverock. "However, if anyone believes they have been a victim of investment fraud, they are encouraged to contact their local FBI office."

Elia's only response in court so far has been to invoke his Fifth Amendment right against self-incrimination. Multiple calls from the Sun Sentinel to his two attorneys, Miami-based Andrew Rier and Massachusetts-based James N. Doherty Jr., were not returned.

Elia and his wife Darlene moved out of their home of 13 years overnight in January.

Elia is accused in court papers of promoting himself as an investment adviser able to generate average profits of 20 percent a year, using clients' money to purchase and sell stocks . The family suing him says that when they wanted to withdraw their money last year, Elia only gave them excuses.

"This has been emotionally devastating," said Michael Imbesi of San Diego, whose family filed the Broward Circuit Court lawsuit. Imbesi said his savings have been wiped out, along with those of his father, stepmother and his sister, who suffers from an incurable cancer.

Broward Circuit Judge Carol-Lisa Phillips froze five bank accounts of Elia's businesses after an emergency injunction was filed by the Imbesis' law firm, Sallah and Cox. Court records show an accountant subsequently found that Elia:

•Transferred more than $1.6 million from an International Consultants account to a company controlled by his wife.

•Transferred more than $729,000 from International Consultants to another company controlled by him and his wife, Elia Realty.

•Withdrew at least $242,000 in cash in 2010 and 2011. An additional $21,000 went for car payments to high-end auto dealerships. Money from the corporate accounts also was used for mortgage payments and to cover lawn service, pool service and utilities.

Business records show that Elia founded International Consultants in 2000 with it listing the same address on West Prospect Road in Fort Lauderdale for the last decade. The building's owner said Elia hasn't had an office there for at least three years and when he did, it was a little more than a desk and the mail would stack up between his infrequent visits.

"We used to call him a phantom," said building owner Joel Marcus.

Imbesi said he first started investing with Elia in 2005 and for years, got his statements promptly, usually showing returns of 4 to 7 percent per quarter. He was so happy he felt comfortable recommending Elia to relatives. His elderly father and stepmother moved their retirement nest egg to International Consultants.

But starting in spring 2011, Imbesi said, Elia became late in distributing money. He said Elia offered explanations like having medical issues and that his email had been hacked.

Imbesi's father Peter and stepmother Marlene grew so uncomfortable that they asked for their principal investment of $250,000 back in full, without interest. Imbesi said that what they got instead were excuses and delay tactics, causing his stepmother to get stressed she was hospitalized after a severe anxiety attack.

Imbesi also discovered Elia had shown him phony financial paperwork, according to the lawsuit filed in October.

The Imbesis' attorneys are now subpoenaing court records and witnesses.

They took Elia's deposition in November, but after answering some questions about his background, Elia invoked his Fifth Amendment right to remain silent.

The Imbesi lawsuit is not the first time Elia has been accused of operating International Consultants as a Ponzi scheme. A Georgia man alleged in a 2008 case that he invested more than $50,000 with the company and that when he demanded his principal back, it wasn't returned.